Written by Matt Allen, as originally published in The Reverse Review.

 

With a quick Internet search, you can find general data about the HECM market, like historical endorsement numbers and the top 100 HECM lenders for any given month. What you might not find is detailed information about HECM endorsements, including interest rates, proceed use and endorsements by state.

Using HUD’s HECM Single-Family Snapshot, which provides monthly updates on borrower stats, I extracted some very interesting data that sheds light on HECM lending in 2016. In reviewing the data, I was surprised by the amount of HECM-to-HECM originations. It was almost double that of HECM for Purchase transactions last year. Personally, I spoke with more than 50 people in 2015 and 2016 who wanted to refinance, but only one qualified to do so. In my career, I have only closed one such loan. But these statistics have inspired me to rethink this avenue and work harder to connect with seniors who may benefit from a refinance.

I was also surprised by how small the HECM for Purchase origination volume was. H4P transactions accounted for more than 15 percent of my business in 2016. I believe this program presents a huge opportunity for growth for any loan officers willing to go after the business.

Reviewing HUD’s data allows loan officers to see how their personal production compares with national numbers. I suggest loan officers visit HUD’s site and review the data for their state, which may help them improve their marketing targets. Perhaps if originators are armed with more information about last year’s origination trends, they can better connect with clients in the year ahead.